How The 'Sharing Company' Is Revolutionizing B2B

Article views

7132

VIEWS

Since
the mid-2000s, the so-called sharing economy has grown from almost nothing to a
pool of global businesses valued in the billions of dollars. The concept—people
using technology to find and purchase one another’s extra resources—represents
a triumph of trust and crowdsourcing. Peer-to-peer financial firms such as
Lending Club, transportation services such as Uber, and lodging brokerages such
as Airbnb have all rapidly taken off, using Internet-based platforms to connect
people directly without highly paid intermediaries. It’s no wonder investors
are so intrigued, and the rest of us are a little enervated by all the hype.

But
there’s a less flashy trend emerging from the sharing economy, and it probably
presents a larger opportunity than consumer sharing. It is the open sharing
of resources among businesses: peer-to-peer enterprise exchange.

Probably
the most widespread sharing-company practice to date involves unused real
estate. If you’re reading this in a typical office, half the desks around you
may be vacant. But businesses can now find digital platforms that create global
connections between owners and renters and help them use these assets more
effectively. Sharemyoffice.co.uk, for example, offers a service connecting
short-term tenants to businesses with spare office space. Similarly, as Rachel
Botsman noted in the September 2014 issue of Harvard Business Review, the
Marriott hotel chain has converted empty conference rooms into rentable work
spaces through the online platform LiquidSpace.

These
examples are largely related to business-to-consumer opportunities. But
the real power of peer-to-peer enterprise exchange may be found in B2B
transactions. Take manufacturing, where the versatility of digital fabrication
and other flexible manufacturing technologies allows companies to share their
production facilities and equipment. This matters when today’s factories
operate at an average of 20 percent below capacity. In 2011, Med-Immune (the
biologics unit of pharma company AstraZeneca) agreed to share its manufacturing
facilities with fellow pharma giant Merck—pairing the former’s excess capacity
with the latter’s desire for greater flexibility.

As
online platforms that are oriented toward industrial companies emerge, it will
be more feasible to share large raw materials, distribution
infrastructure, and other capital costs. Shared sourcing platforms could also make
it easier for companies to pool their purchases of materials with low
environmental impact.

The
sharing market for intangible assets—a company’s brainpower, knowledge, and
intellectual capital—shows just as much promise. In many companies, for
example, technical expertise is severely underused, simply because the work of
the R&D staff doesn’t fit with the company’s current strategic priorities.
But rather than divest its facilities, a company can share its staff.

In a
sense, companies have been exchanging their brainpower this way for years.
Early-stage R&D investment in the pharmaceutical and automotive industries
often takes place through a consortium of partners, with secondment of key
people occurring whenever leaders see the right opportunity. But now experts
can be lent to other companies in a much more fluid, comprehensive fashion,
through platforms for staff exchange. One online staffing market run by Elance
and oDesk, exchange sites for freelance work that merged in 2013, brokered
US$750 million worth of work that year.

Intellectual
capital is another intangible asset with sharing potential.
Technology-intensive companies amass huge stockpiles of patents. The top five
U.S. patent filers—IBM, Samsung, Canon, Sony, and Microsoft—together filed more
than 21,000 in 2013 alone. But only a fraction of all patents filed are put to
productive use, because of the investment involved in bringing products to market.

The
potential here is not just to garner ideas from outside inventors through
open innovation. Nor is it to open up a platform for third-party developers to
introduce ancillary products and software, as computer companies have done for
decades. The real potential is for new platforms to evolve that offer a segment
of a company’s intellectual property base to the world at large, so that others
may do things with it, and the patent holder may profit.

In the
current form of this relationship, the two parties collaborate to bring
innovations to market. The Chinese appliance company Haier, for example,
invites inventors from outside the company to propose innovations they could
produce together. But collaboration might not always be necessary. A company with
a patent for a new type of battery technology, for instance, might choose not
to develop it, but by placing the battery technology on an exchange, the
company could make a connection to another company with a complementary
technology that would otherwise never have been made.

In some
technology-intensive industries, a more liquid market in intellectual property
is seeing competitors become collaborators. Apple announced a wide-ranging
patent licensing deal with HTC in 2012. Google and Samsung have just agreed to
share all new patents filed over the next decade. There is potential for such
deals to help prevent costly patent wars, freeing up resources with which
companies can focus on innovation.

Consumer-sharing
efforts like Airbnb suggest that participants become more collegial and
empathetic because their experience is not just transactional. They are staying
in one another’s homes. Something similar could happen in business, as
executives and employees share their resources, their intellectual property, their
time, and their work space. That could be the greatest benefit of all,
resulting in greater efficiency, a more energized workforce, and new products
and services that meet consumers’ needs.